Sydney Morning Herald State Political Editor

There has been plenty of damaging evidence about the culture of the NSW Labor party emanating from the witness box of the Independent Commission Against Corruption over the past couple of weeks, but perhaps none so devastating as what emerged early on Tuesday during a torrid cross examination of the former resources minister, Ian Macdonald.

Counsel assisting the inquiry, Geoffrey Watson, SC, began probing Macdonald's recollection of what he told his Labor colleagues and the parliament when he first learnt that a potentially lucrative new mining tenement issued by his department was "smack, bang on top of" a property owned by his colleague Eddie Obeid.

To the question of what he disclosed to cabinet of the blindingly clear conflict of interest, Macondald admitted: "I didn't disclose it."

Asked when he first raised the matter with his parliamentary colleagues, Macdonald pleaded that he didn't recall doing so at all.

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"Was it a secret?" asked Watson, incredulously.

"No, no one asked," Macdonald replied. "It was in all in the papers at the time. If anyone had a question about it they could have asked me at any time."

Nobody asked. It has become a central theme in the unfurling of what may turn out to be the worst case of official corruption in the state's history.

We are witnessing a host of current and former Labor MPs duck and dodge and express their shock and dismay at what is unfolding at ICAC.

What is becoming clear is that none of them pressed for real answers at the time. Their inaction stands as a glaring indictment and reinforces the idea that if not individually, then at least collectively, they share much of the blame for what was going on under their noses.

As Watson alluded to, questions about the Obeid family's interests were hardly a secret.

Journalists, mainly from TheSydney Morning Herald and TheAustralian Financial Review, have been sounding the alarm and urging closer investigation for years.

On Tuesday the commission was even read a 2010 exchange prompted by some of this reporting between the then upper house Greens MP, Lee Rhiannon, and Macdonald, all faithfully recorded in Hansard.

Why the inaction? One explanation is Obeid's status as a powerful factional warlord, about which we have heard so much over the past weeks and months.

If that is the case it only serves to reinforce the power he had over the part and the succession of premiers he helped install - Morris Iemma, Nathan Rees and Kristina Keneally.

That is at least something the party is seeking to address through a series of reforms to rein in the power of the factions within the parliamentary ranks.

But there might be another explanation that will be far more difficult to address.

During a revealing interview on Saturday with the ABC's Geraldine Doogue, the former Labor planning minister, Frank Sartor, shed some light on the subject.

Doogue put it to Sartor that the view of many was that he and his parliamentary colleagues "must have known", to which Sartor replied: "You thought it was a bit dodgy maybe. You thought he was trying to cut corners at [preselections]... a bit of branch stacking here which every political party, including the Liberals, has had forever. It's like a continuum; he was on that side of the continuum."

Sartor went on to explain that the options available to politicians who learn of alleged wrongdoing by their colleagues include resignation and arguing against bad policy decisions in cabinet. But he highlighted what he believed was a major disincentive to whistleblowing.

"If you start digging out dirt about a colleague and it turns out you're not onto something real quick, you are ruined, because you can't be undermining a colleague," he said.

"Even if you've got a suspicion that something's wrong, you can't do it. So you've got to be very careful about what you do about colleagues."

Sartor said the benefit of the ICAC and similar investigative bodies was that "they can do all this separately".

"But the danger with MPs dobbing in their colleagues is if you get it wrong, you might as well go now. You're gone."

In a practical sense, Sartor is probably right, but for men and women elected to represent and defend the public interest, it is a feeble excuse.

Macdonald's evidence, if truthful, shows dozens of MPs dismally failed in their most important duty. This is particularly true for the parliamentary leadership, which appears to have not lifted a finger to demand answers to the allegations swirling around Macdonald and Obeid at the time.

It shames every member of the former Labor government who lacked the courage to sound the alarm, despite the potential personal cost.